The Leading, Coincident and Lagging Economic Indexes (LEI) are essential composite averages of several indicators. They summarise and reveal turning points in the business cycle, in this case real GDP.

Overview:

As reported by the Economic Affairs Division, the LEI was projected to have risen at the end of the first quarter owing mainly to increases in the oil price index and long-stay arrivals. Long- stay arrivals from Canada were the lowest performing component of the LEI in the first quarter of 2011. The CEI, which reflects current economic patterns, grew also during the first quarter, marking four consecutive quarters of growth. This growth was led by increases in the index of Construction Materials and Fuel Imports.

The Leading Economic Index1 (LEI): The LEI rose slightly to a projected 102.0 in the first quarter (January – March) of 2011. This followed a revised fourth quarter of 2010 (October -December) index of 101.2 per cent and third quarter (July – September) index of 101.8.These outcomes continue to support an outlook for a possible but slow recovery over the short- term to medium term. The LEI was led by increases in – Oil Prices (6.1 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); the Long-Stay Arrivals (3.0 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); the Money Supply (2.4 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Real GDP in the US (0.6 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Labour Force Index (0.4 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Real GDP in the UK (0.2 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Treasury Bill Rate (0.1 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0);

FIRST QUARTER (JAN – MARCH) 2011-1

and the Average Lending Rate (0.1 per cent).Decreases were recorded for Long-Stay Arrivals from Canada (2.2 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); and Non-Durable Consumer Imports (1.9 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); and Durable Consumer Imports (1.7 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0);Long Stay Arrivals from CARICOM (0.2 per cent).

The Coincident Economic Index (CEI): The CEI rose to a projected 106.4 in the first quarter of 2011, compared with indexes of 104.7 and 105.3 in the third and fourth quarter 2010, respectively. Increases were recorded for Construction Materials by 4.3 per cent; Fuel Imports (2.3 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Cruise-Ship Passenger Arrivals (1.5 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Retail Price Index (1.1 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0);Retained Imports (1.1 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Total Consumer Imports (1.0 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Intermediate Goods Imports (0.9 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Hotel Room Occupancy (0.7 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Hotel Bed Occupancy (0.7 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Real GDP for Canada (0.6 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Machinery Goods Imports (0.5 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); and Employment (0.2 per cent).

1 An increase in the LEI signals that real GDP is expected to increase within the next six months, while a fall in the LEI alternatively suggests that real GDP will likely fall within the next six months. The suggested changes to the real GDP, based of the LEI are generally expected to take effect within the short-term period (6 months to 1 year).

Composite Index for Barbados – 1st Quarter 2011, 2 May 12, 2011

Alternatively, decreases were registered for Capital Goods Imports (2.0 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); and the Index of Industrial Production (0.3 per cent).

FIRST QUARTER (JAN – MARCH) 2011-2

The Lagging Economic Index (LAG): The LAG rose to an estimated 94.8 in the first quarter of 2011, following a previous quarter of 93.1 (September-December).

Preliminary increases were recorded for the Long-Stay Arrivals from USA (7.1 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Rate of Inflation (3.0 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Total Reserves less Gold (2.1 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); Long-Stay Arrivals from UK (1.2 per cent, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, ‘, NULL, NULL, 0); and Domestic Exports (1.1 per cent).

A decline was registered for Average Length of Stay by Tourists by 0.1 per cent.

The Weighted Average Deposit Rate, the Prime Lending Rate and the Minimum Deposit Rate remained unchanged for the period. (Research and Planning Unit Economic Affairs Division, Ministry of Finance and Economic Affairs)

Author: Research and Planning Unit, Economic Affairs Division, Ministry

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